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Suppose you observe the following situation: Security Beta Expected Return Peat Co. 1.70 Re-Peat Co. .85 13.6 10.8 Assume these securities are correctly priced.

Suppose you observe the following situation: Security Beta Expected Return Peat Co. 1.70 Re-Peat Co. .85 13.6 10.8 Assume these securities are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected return on market Risk-free rate % %

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